SA's small and medium business IT spend is set to see double-digit growth, accounting for 80% of total IT spend by 2020, says BMI-Techknowledge.
Speaking at the Small Business Forum, in Midrand, this morning, BMI-T senior analyst Roy Blume said SMBs accounted for 50% of IT spend in 2003.
However, this sector has become attractive to IT players, with a number of products developed specifically to address its needs. As a result, SMB IT spend will see double-digit growth in 2007-2010, culminating in this market accounting for 80% of total IT spend in SA, he noted.
The really small companies, with less than five employees, spend much less on IT, as they have other resource challenges, he added.
Blume said SMB IT spend will grow by 6.5% in 2007, accounting for R12 billion to R15 billion of revenue. Software will grow by 5.6% and service by 6.5%, with hardware seeing slow growth of 3.8%, he explained.
Blume noted hardware investment is becoming less important, as stronger focus is on extracting value from applications.
What SMBs want
Oracle's small business manager Bev Scott said organisations in the mid-market hate upgrading IT systems, as the cost from the resource perspective is enormous. "Where does the cost, in terms of money and the people who do the work, begin or end?"
Scott said IT executives and business executives see the world differently. There should be recognition that while IT is an enabler, there needs to be a business imperative, she emphasised.
Scott added that customer relationship management is becoming fashionable again, but in a new incarnation. It has become increasingly important to ensure customer satisfaction, as SMBs have more choice.
IBM director of SMB South and Central Africa Gary Carroll said a recent international survey of 1 200 employees found new business processes that address CRM would be key in 2007.
Respondents expressed strong intention to use technology to gain new clients, with 90% saying there would be dramatic changes in the way they address customer relationship management. They also said operational efficiency was imperative to survive and grow, he added.
Blume noted the big challenge for SMBs is generating cash flow and sales. SMBs, therefore, need IT to help them do their business more efficiently and profitably, without having to worry about the IT tools being used.
He said there is no need for larger SMBs to go for the big bang approach when setting up their IT infrastructure. SMBs need to ask themselves if IT tools are relevant, measurable and sustainable.
Share
